Pharmacy restructuring for growing stores, revenues: Apollo Hospitals

Healthcare major Apollo Hospitals Enterprise on Tuesday said its decision to divest its front-end pharmacy business to Apollo Pharmacy Ltd was taken to grow the number of pharmacies to 5,000 and achieve a revenue of Rs 10,000 crore. In November 2018, the company had said it was divesting its front-end pharmacy business to Apollo Pharmacy Ltd for a lump-sum cash consideration of Rs 527.8 crore as part of a restructuring exercise.

"Our strategic intent is clear – we are focused on growing to 5,000 stores, achieving Rs 10,000 crore in revenues, and increasing sales from private label products, improving EBITDA & Return on Investment (ROI), while simultaneously building our digital play," Apollo Hospitals Enterprise Ltd (AHEL) said in a statement. The group has moved ahead with its plans to build a strong digital platform, simultaneously bolstering offline delivery capabilities, it added.

"We are confident that this strategy will create significant value for AHEL shareholders. We reiterate that value accretion from the growth in Stand Alone Pharmacies (SAP) business will be fully to all of AHEL's shareholders," the statement said. The demerger is targeted at creating a platform for AHEL to execute on an omni-channel strategy for its Pharmacy business and was the the first step in a multi-year journey of unlocking value for the AHEL shareholders, it added.

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